China seeks to achieve climate goals with new framework
China has announced new guidelines to accelerate the country's energy transition and achieve its decarbonisation goals.
Under the guidelines, China expects the scale of its energy conservation and environmental protection industry to reach about 15 trillion yuan ($2.1 trillion) by 2030, according to a statement by the Central Committee of the Communist Party of China (CPC) and the State Council.
The country aims to accelerate progress in carbon emission reduction, resource utilisation and green development by 2030. It targets installed capacity of pumped-storage hydropower to exceed 120mn kW by then, and the carbon emission intensity of commercial transport for each unit of turnover to drop by about 9.5pc compared with 2020.
China targets to establish a green, low-carbon circular economy by 2035, with carbon emissions declining after reaching their peak. China aims to hit peak CO2 emissions by 2030 and net zero emissions by 2060.
China's installed renewable capacity reached 1.653bn kW as of the end of June, accounting for 53.8pc of total installed capacity, according to the National Development and Reform Commission (NDRC). The country achieved almost double its target for non-fossil power generation additions last year at 300GW, compared with a goal of 160GW, according to state-linked China Renewable Energy Engineering Institute. In the new framework, the target for non-fossil fuels in the country's primary energy consumption remains at 25pc by 2030, unchanged from its 2021 nationally determined contribution (NDC), and up from 15.3pc in 2019.
China's 2021 NDC also states that it will lower its CO2 emissions per unit of GDP by over 65pc from the 2005 level, and that it will bring its total installed capacity of wind and solar power to over 1.2bn kW. The country is expected to submit its 2035 climate targets to the UN early next year, including updates to its pre-existing 2030 targets.
The framework targets five main areas. It aims to optimise land space planning for green and low-carbon developments and seeks to accelerate the low-carbon transformation of the industrial sector. This includes the steel, non-ferrous metals and petrochemical industries. It also targets to advance the low-carbon transformation of the energy sector and develop non-fossil fuel energy and promotes the green transformation of the transportation sector. Lastly it aims to advance the green transformation of urban and rural construction, including agricultural developments.
Challenges ahead
China's green transformation faces significant challenges despite progress, the NDRC said. The country's energy and industrial sectors remain heavily dependent on coal, straining environmental goals, the commission said.
Under the latest framework, the country still aims to promote the clean and efficient use of coal and reasonably control the growth of coal consumption during the 14th five-year plan period, but to gradually reduce it in the subsequent five years. The National Energy Administration (NEA), China's energy regulator, expects the percentage of thermal generation capacity to fall to 45pc by the end of 2024, from 47.6pc by the end of 2023.
China in July announced plans to explore co-firing renewable ammonia and biomass at its coal-fired plants, as well as carbon capture, utilisation and storage. These measures will be applied to a number of projects by 2025.
The government also plans to develop a fiscal and taxation policy to promote low-carbon developments under the new guidelines, and aims to implement relevant tax incentives, as well as improve the green tax system. It also aims to bolster financial instruments such as green equity financing, green financial leasing, as well as central budgetary investment to provide support for key projects.
The new guidelines did not provide any details on methane cuts. The country has yet to set firm methane-reduction targets although it agreed in November to set goals to cover all greenhouse gases.
China, dubbed by the Paris-based IEA as the "clean energy powerhouse," is projected to spend $675bn on clean energy this year alone. Its renewable energy power generation deployment has progressed rapidly, but it remains unclear if this will prompt Beijing to raise its decarbonisation ambitions.
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Mexico June trade gap driven by falling crude exports
Mexico June trade gap driven by falling crude exports
Mexico City, 13 August (Argus) — Mexico's trade balance swung to a deficit of $1.04bn in June, impacted by reduced oil exports at lower prices and a weaker peso. The trade gap in June flipped from a $1.99bn surplus in May, acccording to statistics agency Inegi's final estimate, as exports fell at nearly twice the rate of declines in imports. Exports fell by 12pc to $48.9bn in June from the prior month, while imports declined by 7pc to $49.9bn from the prior month. The trade balance was in deficit for four of the six months in the first half of 2024. The deficit in the first half of the year was $5.5bn compared with a $6.5bn deficit a year earlier. In explaining the June deficit, Banorte cited "a slight moderation in oil prices relative to May, with the Mexican oil mix averaging $73.49/b in the month; a depreciation of the Mexican peso; and the temporary suspension of exports of some agricultural products to the US." Likewise, exports were down 5.7pc from June 2023, while imports were 3.6pc lower than a year earlier. The deficit was below Mexican bank Banorte's forecast for a $450mn surplus in June. Inegi breaks Mexico's trade data into two broad categories of "oil" and "non-oil", where the oil category includes crude, natural gas, oil derivatives and petrochemicals. Non-oil includes everything else from light vehicles and farm goods to copper and other mined minerals, Exports in the broad oil category declined by 33pc to $2.1bn in June from $3.2bn in May, with imports down by 13pc at $2.82bn in June from $3.23bn in May. Exports were down by 27pc from a year prior, with imports down by 26pc. Within this, crude exports were valued at $1.73bn in June, a sharp drop from $2.15bn in May and lower than the $2.44bn in the same month of 2023. Natural gas imports, meanwhile, were valued at $395mn in June from $316mn in May and $469mn in June 2023. Non-oil exports reached $46.8bn in June, with $15.6bn from automotive exports. This was down by 5pc and 5.2pc, respectively from May. Still, as reported last week by Mexico's auto associations , auto exports have climbed by 8.4pc in the first seven months of the year from a year earlier. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
California narrows LCFS goals to tougher targets
California narrows LCFS goals to tougher targets
Houston, 13 August (Argus) — California will pursue transportation fuel carbon reduction targets in 2025 nearly twice as tough as originally proposed under final Low Carbon Fuel Standard (LCFS) rulemaking language released late Monday. The California Air Resources Board (CARB) will consider a one-time tightening of annual targets for gasoline and diesel by 9pc in 2025, compared with the usual 1.25pc annual reduction and a 5pc stepdown first proposed in December 2023. Final rulemaking language introduced a new 20pc/yr cap on a company's credit generation from soybean- and canola-oil-based biodiesel or renewable diesel to begin in 2028. The updated rule also dropped proposals to require carbon reductions from jet fuel in addition to gasoline and diesel, a controversial proposal aligned with governor Gavin Newsom's (D) ambitions for lower-carbon air travel but which participants warned would not achieve its targets. The new proposal immediately jolted a lethargic credit market that earlier this year slumped to the lowest spot price in nearly a decade under the weight of growing credit supplies. Current quarter trade raced higher by $12.50 — 26pc — in rare after-hours activity less than two hours after CARB staff published the latest documents. Public comment on the proposals will continue to 27 August ahead of a planned 8 November public hearing and potential board vote. The program changes could be in place by the end of the first quarter of 2025, according to staff. LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed these annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. Surging use of renewable diesel and outsized credit generation from renewable natural gas have overwhelmed deficit generation to create a glut of credits available for future compliance. LCFS credits do not expire, and 26.1mn metric tonnes of credits — higher by 16pc than all the new deficits generated in 2023 — were available for future compliance by the end of March. Credits fell in May to trade at $40/t, the lowest level for current quarter credits since June 2015. California late last year formally proposed tougher annual targets, off-ramps for certain fuels and other changes to North America's largest and oldest LCFS program. Staff had initially targeted March to put ideas including a one-time, 5pc reduction to targets in 2025 and automatic mechanisms to match targets to credit and deficit generation before the board for formal approval, but they delayed that meeting after receiving hundreds of distinct comments on the original proposal. Staff shifted the 2025 target to at least 7pc after an April workshop discussion and another record-breaking quarter of increases in credits available for future compliance. The 9pc recommendation followed the continued growth of credit supplies in recent quarters. Previous modeling estimated that such a target could draw down the credit bank by 8.2mn t in its first year. Uncertainty over how fuel suppliers and consumers would respond to that target led staff to leave in place the proposed 30pc target by 2030. An outright cap on credits generated from soybean- or canola-oil derived biomass-based diesels replaced initially proposed lighter "guard rails" on crop-based credit generation. The change would send a stronger market signal preferring waste-based feedstocks for diesel fuels that California expects to replace with zero-emission alternatives. And staff dropped a proposed obligation on jet fuel used in intrastate flights, estimated to make up 10pc of California's jet fuel consumption. Participants had warned the measure would stoke more credit purchases than renewable jet fuel buying, due to the structure of the aviation fuel market . By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Genesis secures more gas to curb New Zealand shortages
Genesis secures more gas to curb New Zealand shortages
Sydney, 13 August (Argus) — New Zealand upstream firm and utility Genesis Energy has secured emergency gas supplies for its dual gas- and coal-fired Huntly power station on the North Island. Genesis has secured 3.2PJ (86mn m³) of gas to allow the 400MW No.5 unit at Huntly to reach full capacity for the first time this winter, it said on 13 August, describing the electricity grid as facing "unprecedented pressure". An agreement has been reached with Canadian methanol manufacturer Methanex, which will shut its Motunui plants in the North Island's Taranaki province until the end of October to allow for more gas-fired power generation, Genesis said. The commercial arrangements regarding the gas transfer are structured to provide Methanex with a base price for each unit of gas delivered, with further incremental value shared between the parties depending on electricity pricing over the period, it said on 12 August. Methanex's 1.72mn t/yr plant in Motunui has paused production in the past, also diverting feedstock natural gas to support electricity generation in the winter of 2021 . The 953MW Huntly — New Zealand's largest power station by capacity and the country's only coal-fired unit, has been under significant strain as dry, cold conditions have led to increased demand during winter as hydroelectricity inflows remain low. New Zealand has also experienced light winds cutting expected wind-powered generation this winter, with Genesis planning coal imports for the first time since 2022 in response to lower domestic gas output and rapidly falling coal stocks. LNG imports investigated New Zealand energy minister Simeon Brown told parliament on 7 August his administration was investigating two separate options to ease the gas shortfall in the short to medium term. Industry body the Gas Industry Company (GIC) is studying the feasibility of importing LNG, while also considering policies to increase investment in flexible gas-fired generation, Brown said. Data from upstream firms released earlier this year show a significant drop in proven plus probable reserves, falling from 1,635PJ to 1,300PJ, he added. Gas production into open access pipelines was 58.8PJ during January-June, GIC said in its April-June quarterly report, 20pc down on 73.7PJ a year earlier, while gas-fired power demand grew by 10pc against April-June 2023. New Zealand's National Party-led government is aiming to overturn a 2018 ban on new oil and gas exploration with legislation to be introduced to parliament later this year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Bill would require US EIA to share more SAF data
Bill would require US EIA to share more SAF data
New York, 12 August (Argus) — A bipartisan bill would require the US Energy Information Administration (EIA) to report more granular data about sustainable aviation fuel (SAF), which supporters say would add transparency to an opaque market and help scale up production. The agency currently tracks SAF and offers periodic updates on the fuel's use, though not on any regular cadence like it does with conventional petroleum-based fuels and more established biofuels like ethanol, biodiesel, and renewable diesel. But the US Department of Energy and EIA would have to shift course and provide more frequent and technical SAF updates "as soon as practicable" if the bill, introduced late last week by representatives Mike Flood (R-Nebraska) and Troy Carter (D-Louisiana), ends up passing. According to bill text shared with Argus , EIA would have to report on SAF production across the country and in each state, imports, and the "type, origin, and volume of feedstock" used to make SAF. The bill defines SAF as liquid fuel that produces at least 50pc fewer lifecycle greenhouse gas emissions as conventional jet fuel and that is not produced from petroleum or palm oil derivatives, mirroring eligibility requirements set out in the Inflation Reduction Act for a SAF tax credit. The bill specifically requires that EIA's Petroleum Supply Monthly and Weekly Petroleum Status Report include the new SAF data along with "any other relevant report." Potentially applicable publications include EIA's monthly report estimating biofuel production capacity — which currently lumps SAF together with renewable diesel and lesser-used biofuels — and a monthly outlook that includes production, consumption, and import projections for various commodities. Various biofuels associations — including corn groups that are banking on rising SAF production to create new demand for ethanol — voiced their support. Geoff Cooper, president of the Renewable Fuels Association, said that "this legislation would ensure SAF producers and users have the information they need to make informed decisions and smart investments." While relatively little supply is available today, EIA said last month that SAF production capacity could hit nearly 30,000 b/d this year and increase again in 2025 if planned capacity additions are not delayed. Refiners like Phillips 66, Calumet, and Valero have set plans to convert more of their renewable diesel production to SAF over the next year. There are also other production pathways in various stages of development, such as using ethanol as feedstock or converting syngas from agricultural and forest wastes into liquid fuel. The bill, which has five Democratic and two Republican sponsors, is pending before the House Committee on Energy and Commerce. EIA declined to comment on any policy proposal. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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